A Day In The Life Of A Mortgage Broker

A Day In The Life Of A Mortgage Broker

Historically, prior to the credit crunch, the number of customers working with a mortgage broker compared to those dealing directly with their bank was relatively evenly split.

Now, thanks to the arrival of highly experienced mortgage brokers such as Collins Mayaki many clients have recognised the advantages of consulting an experienced mortgage broker, particularly if you happen to be a first home buyer or where you are looking to refinance your existing property.

Taking The Mystery Out Of Mortgage Broking

As Collins observed recently, despite all the success mortgage brokers have enjoyed in recent years, many people still do not know what a mortgage broker’s day to day looks like or what is involved in arranging that desperately longed-for mortgage for a client.

So, here are some insights into what a mortgage broker actually does during a typical working day.
Most clients who approach a mortgage broker have a general idea of what they are looking for in a mortgage. Thanks to Google, most people do their research online well before they approach a broker for specific advice.

Usually, a client will approach their broker with an outline of what they think is reasonable and they are looking for their broker to confirm they are on the right path and to match them up with prospective lenders with loan products that match their criteria.

Sometimes clients are open-minded in terms of what they are looking for and are simply looking for guidance on where to start and what factors they need to consider in their mortgage application.

In other instances the client is quite specific; they have their figures worked out and are simply looking for the best deal for their personal circumstances. Whichever way the conversation begins, a broker such as Collins will take extensive notes as he begins to understand what his client is after.

Problem Solving And Managing Relationships

Arranging mortgages are typically all about problem-solving. Each client has unique circumstances and needs and similarly, each lender attempts to position their loan product in the market in a way that differentiates them from the competition, regulations permitting.

So much of a broker’s typical day is devoted to problem-solving, balancing the best fit for their client with the cheapest loan option with the maximum features. Your broker usually maps out the different loan features they believe their client will require, against a short list of potential lenders and their loan criteria. This background is then joined by more details about where the loan deposit is coming from, what’s being bought, what if anything is being sold and finally a list of potential unknowns is jotted down.

This process identifies the likely shape the lending deal needs to take and the problems if any that need to be solved or managed. This information then goes on file.

For most clients, the most common and often the most complex problem to solve is how to maximise the client’s borrowing capacity. This is often tricky, particularly in recent times as lenders tighten up on their lending criteria.

Ultimately, each individual lender has their own guidelines they use in determining what is or what is not affordable. Hence there is no guarantee an assessor will sign off on a loan application, regardless of how much care a broker exercises in calculating their client’s borrowing capacity.

The trick is to understand a lender’s bottom line in assessing a loan application. Many lenders will assess different sources of income in quite different ways. If you work a second job, a lender may only take 50 per cent of that income into consideration or, if you are self-employed, some lenders assess your borrowing capability based on an average of two years financials.

Naturally, this can have a significant impact on the maximum loan amount they will consider lending.
Following borrowing capacity, the type of security used to secure the loan against is the next hurdle impacting a loan application, especially if it applies to an investment property. Some lenders are willing to lend higher amounts based on the rental income the property is likely to generate than other institutions, while other lenders won’t lend against certain types of investment properties at all.

Experience and industry knowledge are necessary for mortgage brokers as not all lenders publish their credit criteria. A potential lender may not publicise their stricter qualifying conditions therefore affecting the loan application. Being able to rely on experience to know what to look for or what issues to query is a regular part of any mortgage brokers daily routine.

Tracking Down The Right Deal

Your broker is always anxious to identify the most suitable deal for a client’s specific needs. Some loan products your broker will quickly discard, while other require researching the lender’s website or calling the lender directly to discuss.

Most lenders assign Business Development Managers (BDM) to support brokers, this ensures the broker understands where their bank’s lending focus is, to advise on complex cases and to workshop through issues if the loan application encounters problems. It’s easy to understand why your broker spends so much time on the phone!

Once a potential loan product has been identified, the lending criteria confirmed and other assessment or documentation requirements evaluated, your broker will report back to you, the client, providing a summary of the loan product, the costs of the loan over its effective loan term and other potential associated costs related to putting the application in place.

After this, your broker oversees the application through to formal approval. At this point, it is common for lenders to require some aspect of the loan application to be clarified, often to the frustration of the client. Working with an experienced mortgage broker who understands the assessor’s requirements which allows them a position to negotiate the best possible outcome for you.

Final Observation
So, what makes Collins Mayaki an excellent broker? For most clients, it comes down to the depth of knowledge, experience and the strength of his relationships with a range of lenders. When you first contact a mortgage broker, an excellent one will be able to give sensible advice, outline qualifying criteria and required documentation during your initial phone call. You should feel confident your broker knows the answers to your questions and can anticipate potential issues that will need to be dealt with. An excellent mortgage broker should also be able to source great deals to suit your personal circumstances.